The Economic Effects of the Eastern Oil Boom in the Flathead

The Flathead Valley may be many miles and hours away from the oil fields of Eastern Montana and North Dakota, but locals are seeking work, or starting businesses around the Baaken Boom.

Flathead residents Michael and Diana Blend own two pieces of property in Glendive on the eastern edge of Montana. Their company Montana Rentals owns, operates, and is updating two parks for Mobile Homes and Recreational Vehicles. “We thought originally we would just meet the tourist trade, and be able to market that.” Diana Blend said they originally bought the properties in 2009.

Until 2008 the Blends ran a construction business in the Flathead focusing on remodeling, production building, and custom home building. Blend said they use those construction skills in a new way in Glendive, “we were initially fixing up mobile homes, and selling those on notes to people who had met with hard times, and who wanted single family housing still, but couldn’t afford a stick built house.” Blend said they’re hiring Flathead Valley sub-contractors they know from their construction company days to work on the eastside properties.

She says the biggest demand is for short-term and transitional housing.

“We found that people will come into the area, and they just need housing right away, so they’re happy to put an RV in our parks and stay there for a while until they find more long term housing, or they’d like to rent something for a week, or a month as they get on board with their new jobs.” Blend said people are in Glendive working on existing drilling projects, exploring for new projects, and getting in place for other oil and gas projects on down the line.

“The opportunity in Eastern Montana has helped us remain here in Western Montana. Which, might seem like a contradiction, but, in actuality it affords us the ability to stay here where we raised our family, and developed a community, and we have friends,” Blend said.

She attended the 10th annual economic future of the Flathead meeting on Wednesday the 25th. Kalispell’s Montana West Economic Development puts on the annual event, and this year a big focus was on energy, and how energy development in the east could affect the Flathead Valley.

Director of Institutional Research, Assessment and Planning for Flathead Valley Community College was one of the speakers. He asked the audience of roughly 200 people to raise their hands if they knew someone from the Flathead working over in North Dakota. Nearly everyone in the audience raised their hand. Elderidge half jokingly said the raised hands make up some of the best data he has about people migrating east for work. He says the data simply hasn’t yet caught up with the situation, and he doesn’t have a clear way to show how many people really are travelling east for work..

The unadjusted unemployment rate for December just came out this week. The Flathead rate remains among the highest in the state at 10.6-percent, with the state average at 6.7-percent. Unemployment rates at 2 and 3-percent in eastern Montana Counties help bring the statewide average down. Elderidge says he believes the local unemployment rate has peaked.

“I think that the oil boom will be a net benefit to Flathead County, as long as households don’t relocate, and as long as we still have excess labor, and we will for a while,” Elderidge says right now many people working on the east side still have their households in the Flathead, and are sending money home.

Overall the tone of the economic forecast was positive, which hasn’t been the case over the past couple of years. The specialists who spoke at the event felt the area has hit bottom in unemployment numbers and real estate in particular, and will begin rebounding this year. Certain industries, like local construction, saw the biggest hits with the recession, and are not expected to recover while so many homes are still for sale.

Job growth for the Flathead Elderidge says is coming from accommodation and food services, manufacturing, healthcare, and in temping agencies. Elderidge says job growth in temping agencies can often be a leading indicator of an expansion in the economy because a business will often hire a temp before they’re confident enough to hire a full time employee.

Presentations were also given by Real Estate Appraiser Jim Kelley, Energy Development Specialist Dan Lloyd of the Montana Department of Commerce, Energy Promotion and Development Division, as well as Dr. Brad Eldredge. Below is a link to the Montana West Economic Developement’s web page with links to their presentations.

http://dobusinessinmontana.com/future-of-the-flathead/

One thought on “The Economic Effects of the Eastern Oil Boom in the Flathead

  1. Pingback: The Flathead Economy on Montana Public Radio : Montana West Economic Development

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